Features

In 1995 Jin Zhiguo was put in charge of the Hans Brewery, a fresh Tsingtao acquisition. On his first day there, he found a financial statement on his desk that said, “Daily production: 1,000.” Not bad, he thought. But then he learned that the number referred to bottles, not cases—and this at a company employing more than 1,000 people. Although it was a moment of “great disbelief,” Jin says that such underperformance wasn’t unusual then for Chinese businesses: The government determined production plans, and few managers paid attention to customer needs or traditional marketing.

He set out to revolutionize the brewery’s culture over the next five years, partly in response to aggressive market competition from Western brands. One of the first things he did was to start sitting in restaurants and talking with customers about beer. What he learned led to a more popular product and better distribution, and within a year production had risen to 790,000 bottles a day. The company had gone from annual losses of 25 million yuan to revenues of 10 million yuan. By 1999, annual revenues had reached 50 million yuan, and Hans had become Tsingtao’s best-performing brewery.

Jin assumed the presidency of Tsingtao in 2001 and helped the company adapt to being market driven. Among his many leadership imperatives was a continuing emphasis on employees’ spending time listening to customers.

Business is the engine of the developed economies that devour a disproportionate share of the world’s nonrenewable resources and produce a disproportionate share of its emissions. We see it, therefore, as both a cause of and a solution to environmental degradation. But how, exactly, can business contribute?

To answer this question, the authors explore two schools of thought. According to one, consumers and companies should do more with the resources they consume, become savvier about recycling and processing their waste, and dampen their appetite for consumption in general. This worldview achieved perhaps its clearest expression in the works of the 19th-century economist Thomas Malthus.

Although the Malthusian view exercises a powerful influence, it is by no means uncontested. An alternative philosophy, which flows from the work of the 20th-century economist and Nobel Prize winner Robert Solow, appeals to our natural optimism by arguing that environmental and other problems can always be resolved through the exercise of human ingenuity.

It’s not hard to see that these two philosophies make uneasy bedfellows. The Malthusian view encourages a tendency toward regulation and restraint, while the Solovian view underlies much of the advocacy for deregulation and the promotion of growth. But if we are to make real progress in solving the world’s environmental problems, the authors write, we will have to apply both philosophies.

Spotlight

Why do some teams consistently deliver high performance while other, seemingly identical teams struggle? Led by Sandy Pentland, researchers at MIT’s Human Dynamics Laboratory set out to solve that puzzle. Hoping to decode the “It factor” that made groups click, they equipped teams from a broad variety of projects and industries (comprising 2,500 individuals in total) with wearable electronic sensors that collected data on their social behavior for weeks at a time.

With remarkable consistency, the data showed that the most important predictor of a team’s success was its communication patterns. Those patterns were as significant as all other factors—intelligence, personality, talent—combined. In fact, the researchers could foretell which teams would outperform simply by looking at the data on their communication, without even meeting their members.

In this article Pentland shares the secrets of his findings and shows how anyone can engineer a great team. He has identified three key communication dynamics that affect performance: energy,engagement, and exploration. Drawing from the data, he has precisely quantified the ideal team patterns for each. Even more significant, he has seen that when teams map their own communication behavior over time and then make adjustments that move it closer to the ideal, they can dramatically improve their performance.

In a fast-paced and ever-changing business environment, traditional teams aren’t always practical. Instead, companies increasingly employ teaming: gathering experts in temporary groups to solve problems they may be encountering for the first and only time. This flexible approach was essential to the completion of the Water Cube, the building that hosted swimming and diving events during the Beijing 2008 Olympic Games, and to the 2010 rescue of 33 Chilean miners. More and more people in nearly every industry now work on teams that vary in duration and have constantly shifting membership.

Teaming presents technical and interpersonal challenges: People must get up to speed quickly on new topics and learn to work with others from different functions, divisions, and cultures. Several project management principles—scoping out the challenge, structuring the boundaries, and sorting tasks for execution—help leaders facilitate effective teaming. Leaders can also foster cross-boundary collaboration by emphasizing purpose, building psychological safety, and embracing failure and conflict.

Individuals who learn to team well acquire knowledge, skills, and networks. Organizations learn to solve complex, cross-disciplinary problems, build stronger and more unified cultures, deliver a wide variety of products and services, and anticipate and manage unexpected events. Teaming helps companies and individuals execute and learn at the same time.

All teams would like to think they do their best work when the stakes are highest—when the company’s future or their own rests on the outcome of their projects. But too often something else happens. In extensive studies of teams at professional service firms, Harvard Business School’s Gardner has seen the same pattern emerge over and over: Teams become increasingly concerned with the risks of failure rather than the requirements of excellence. As a result, they revert to safe, standard approaches instead of delivering original solutions tailored to clients’ needs.

Gardner has a name for this phenomenon: the performance pressure paradox. Here’s how it develops: As pressure mounts, team members start driving toward consensus in ways that shut out vital information. Without even realizing it, they give more weight to shared knowledge and dismiss specialized expertise, such as insights into the client’s technologies, culture, and aspirations. The more generically inclined the team becomes, the more concerned the client grows, which turns up the pressure and pushes the team even further down the generic road.

But forewarned is forearmed. By measuring each person’s contribution deliberately, ruthlessly insisting that no one’s contribution be marginalized, and framing new information within familiar contexts, teams can escape the performance pressure paradox and keep doing their best work when it matters most.

Features

The author, whose biography of Steve Jobs was an instant best seller after the Apple CEO’s death in October 2011, sets out here to correct what he perceives as an undue fixation by many commentators on the rough edges of Jobs’s personality. That personality was integral to his way of doing business, Isaacson writes, but the real lessons from Steve Jobs come from what he actually accomplished. He built the world’s most valuable company, and along the way he helped to transform a number of industries: personal computing, animated movies, music, phones, tablet computing, retail stores, and digital publishing.

In this essay Isaacson describes the 14 imperatives behind Jobs’s approach: focus; simplify; take responsibility end to end; when behind, leapfrog; put products before profits; don’t be a slave to focus groups; bend reality; impute; push for perfection; know both the big picture and the details; tolerate only “A” players; engage face-to-face; combine the humanities with the sciences; and “stay hungry, stay foolish.”

Most companies assume that the easiest way to grow is by investing overseas and that the developing world offers the best opportunities for boosting revenues and profits today. However, success abroad varies widely, and research shows that it’s often tough to increase profits by investing abroad.

A new study of the grocery retail industry reveals that with a few exceptions globalization’s benefits have not accrued to retailers. Local retailers dominate most countries, and international players are absent from the largest retail markets. Moreover, every retailer that has ventured overseas has failed as often as it has succeeded. On average, the extent of internationalization doesn’t have a significant effect on either retailers’ revenue growth rates or profit margins. Rather, it’s the home market’s growth that is the primary driver of profit margins and sales growth.

A few retailers have succeeded in going global by developing strategies that apply four retail-specific rules for globalization. Rule 1: The home market is the linchpin. Retailers can generate the resources they need to go global by applying innovative growth strategies at home. Rule 2: Always bring something new to market. Without an element of novelty, it will be difficult for retailers to overtake entrenched rivals. Rule 3: Differentiation is more important than synergies. Leveraging synergies globally and allowing each country unit to adjust to local needs is a critical balancing act. Rule 4: Timing is critical.

Retailers would do well to stop planting flags and focus instead on a limited set of opportunities where they can establish operations of scale.

If senior executives are feeling ever more pressed for time, why would they add more to their plates? It might sound counterintuitive, but research by Booz & Company’s Gary L. Neilson and Harvard Business School professor Julie Wulf shows that over the past 20 years the CEO’s average span of control, measured by the number of direct reports, has doubled. It stands at almost 10 today.

This gives fresh relevance to a perennial question for senior leaders: Just how much should they take on? The authors suggest five areas to consider: Where are you in the senior executive life cycle? How much cross-organization collaboration is required? How much time do you spend on activities outside your direct span of control? What’s the scope of your role? What’s the best mix of roles for your team?

A diagnostic tool provides guidance for leaders considering these questions and can help them estimate their optimal span of control. The issues explored are ones many senior executives—not just CEOs—should revisit throughout their careers. The best leaders, the authors show, stay mindful of the evolving demands of their job and continually tweak their team as they go.

Reverse innovation—developing ideas in an emerging market and coaxing them to flow uphill to Western markets—poses immense challenges, because it requires a company to overcome the institutionalized thinking that guides its actions. That’s why the experience of the automobile-infotainment division of Harman International is so impressive. The U.S.-based business, known for ultrasophisticated dashboard audiovisual systems designed by German engineers, developed a radically simpler and cheaper way of creating products in emerging markets and then applied what it had learned in the process to its product-­development centers in the West.

Harman did this using a two-part approach: radical change from below combined with astute leadership from above. A small team based in India and China set audacious goals, created a new organizational structure, and adopted new design methods, while the chief executive, Dinesh C. Paliwal, rebranded the company’s future, shifted the corporate center of gravity to emerging markets, made sure that legacy units continued to thrive, and averted conflict between old and new.

Experience

Lessons taught and learned in the challenging, unpredictable environment of a wilderness expedition have direct applications to today’s business world. That’s according to two directors at the National Outdoor Leadership School, who in this article share five principles for expedition—and career—success.

(1) Practice leadership. The fundamental philosophy of NOLS is that leadership can be learned—even by those who don’t think they have a natural ability to lead. You just need to practice making decisions, then reflecting on and learning from the outcomes.

(2) Lead from everywhere. In an expedition group, or in an organization, you can play four roles, often simultaneously: designated leader, active follower, peer leader, and self-leader. Effective teamwork rests on knowing how and when to step into each role.

(4) Keep calm. On expeditions and in business, people often end up scrapping not only Plan A but also Plan B. Leadership involves planning for things you can control, letting go of things you can’t, expecting the unexpected, and maintaining composure when unforeseen circumstances arise.

(5) Disconnect to connect. The fast-paced, high-tech world of work wreaks havoc on leaders’ ability to engage in the careful, strategic thinking required of them. It’s important to disconnect from 21st-century distractions and to connect with nature once in a while.